COUNCIL TAX – ARE WE ALL IN IT TOGETHER?

First Published by: The Guardian 

With multimillionaires accused of salting cash in off-shore havens and generally not paying their way, Miles Brignall looks at the huge anomalies in council taxes

Fancy a six-bedroom, six-bathroom, house in one of London's smartest streets, a stone's throw from Buckingham Palace in the heart of Westminster? It might only have two reception rooms, but it is newly restored, comes with a fine roof terrace, and can be yours assuming you can stump up the £7.45m asking price.

Or maybe you live in the real world. The three-bed semi pictured above in Newark, Nottinghamshire has two reception rooms, like the house in Westminster. It has been extended and, according to the estate agent marketing it, it's in immaculate condition. The owners are hoping to get close to the asking price of £154,950.

But despite inhabiting two very different worlds, the owners of these two homes pay almost exactly the same in council tax – a little over £1,300 a year.

Over the next few weeks millions of householders across the UK will receive their Council Tax demands for the coming year and, amid spending cuts and tax rises, more and more people will be asking why the rich pay so little on their multimillion pound properties.

This week the Lib Dem business minister Vince Cable indicated his party was ready to scrap the 50p top rate of tax in exchange for a new mansion tax. "Basically, you get people with multimillion-pound properties paying exactly the same council tax as somebody in a three-bedroom semi," he said. "So the system doesn't work."

His party has proposed a higher levy on homes worth £2m and more. However, conservative MPs in London are already lining up to oppose such a tax.

Malcolm Rifkind, MP for Kensington and Chelsea, said 81% of properties affected would be in London, half of which are in his constituency. In an article this week he suggested the levy would be "arbitrary, disproportionate and unfair" and declared himself "resolutely opposed to such a tax".

But his arguments may fall on deaf ears in other parts of the country, which have suffered council tax rises at a time of flat or falling wages, and where the disparity between London and the rest of Britain looks less and less sustainable.

Westminster, with some of the world's most expensive real estate, imposes some of the UK's lowest council tax bills. No home in the borough is charged more than the band H charge of £1,375 a year. All properties that were worth more than £320,000 when the calculations were last made in 1990 are placed in the top band – irrespective of whether they are now worth £10m or more.

The residents of Newark, by contrast, pay some of the UK's highest council tax charges. The band B house above is charged at £1,311 a year. Someone living in a top band H house in the town pays £3,373 a year – almost two and a half times as much as in Westminster. Yet Nottinghamshire is an area with below national average incomes.

But this is by no means a problem limited to Nottinghamshire. Across Britain, many families who live in distinctly average homes are paying a month's income to their local authority in council tax.

Stevenage in Hertfordshire, 30 miles north of London, charges a family living in a mid-range band E house £1,778 a year. Compare that with those living in a band E home in Putney or Wimbledon in leafy (and very expensive) south-west London who are paying less than half that amount: £863 a year.

Those lucky enough to be living in one of the area's multimillion pound homes – around Wimbledon Common – pay the top rate of council tax of just £1,413 a year.

And it is not just the flagship Tory boroughs in London that are imposing relatively modest bills. Someone with a band E home in Southwark, a Labour-controlled borough in south London, pays £1,493 a year. In Newark a home in the same band attracts an annual £2,436.

A home in Dulwich village in Southwark, on sale for £4.35m has a council tax bill of £2,443. But a band F house in Bicester, near Oxford, which would sell for around £425,000, attracts a bill of £2,222.

A four-bed detached house in Newcastle-under-Lyme, a smart area near Stoke-on-Trent, is on the market for just under £400,000. It is in band F, and its owners will pay an annual council tax bill of £2,095 – slightly less than the tax the £4.4m Dulwich home attracts.

Council tax rates are set by local councils with local accountability, but the furore over low rates for millionaires – plus growing evidence that the rich also avoid paying stamp duty by registering assets offshore – has turned it into an issue that increasingly divides the coalition government.

Last week the Chartered Institute of Public Finance and Accountancy said 85% of local authorities will freeze council tax for this financial year. But because the authorities that are increasing their charges also tend to be the bigger districts with more households, it warns that 43% of homes will see some increase for 2012-13. 

The Department for Communities and Local Government has urged councils to freeze council tax this year and offered them funding to do so. Of those authorities increasing tax, none are increasing by more than 4%, it says.

Meanwhile, this year's council tax bills are about to start going out to homes across the country. When yours arrives will it be closer to Westminster or Newark?

Have your say: 

Are you paying too much Council Tax?

WASTE COLLECTION CHARGE TO START, PARKING FEES TO BE INCREASED, COUNCIL TAX FREEZE ALL LIES

First Published by: This is Lincolnshire 

PROPOSALS which could see residents charged for the collection of green waste have been blasted by a former district council leader.

Councillor Jeremy Webb has warned that such a move would result in householders amalgamating green waste with other rubbish which would all end up in landfill - incurring a tax penalty for the authority.​

Accusing the administration of having "lost its way", he said East Lindsey District Council also risked forfeiting its reputation for responsible environmental stewardship.

It emerged at a full meeting of the authority that by charging for green waste collections from 2013/14, the authority could raise an estimated £800,000 a year to help it fill a looming £1.2million shortfall.

It is also considering increasing car parking charges to a level that could bring in £400,000 more than it receives at present.

This idea also provoked concern from Mr Webb who said "sweating the motorist" this way would discourage them from parking in market towns where trading conditions for most retailers were already "increasingly fragile."

However, his concerns carried little sway with either the Conservative administration or with the Labour group which found themselves largely in agreement on budgetary arrangements.

Later in the meeting, the authority rubber-stamped proposals to freeze Council Tax in 2012/13 despite needing to find savings totalling £2.4m from its net revenue budget of £17.8m as a result of reductions in Government funding and budget pressures such as increases in fuel and utility prices.

Portfolio holder for finance, Councillor John Upsall, said: "This was an important 2012/2013 budget for the council and through rigorous financial management and planning we've successfully made the savings required to agree a balanced budget without an impact on front line services.

"The challenge becomes even greater and there are still some tough decisions to be made. In making the saving for the next year we will continue to review the services we provide to look for opportunities to make further savings that help to protect services to local people."

Despite the freeze, residents will still see an increase in their Council Tax bills due to a decision by Lincolnshire Police Authority to increase its precept by 3.96 per cent.

In some cases, town and parish councils have also made slight increases to their precepts with Chapel St Leonards residents facing a bill of £51.92 for a Band D property.

No other parish council is setting more than £50, and many, including Wainfleet St Mary, Conisholme and Harrington, have settled on a nil precept.

Are you paying too much Council Tax?

Students should face paying council tax, Lib Dems say

First Published by: The Telegraph

The Liberal Democrats are calling for students to face paying council tax for the first time, Whitehall documents reveal.

At a meeting between Government ministers and local government leaders, a senior Liberal Democrat indicated that councils should be free to charge students Council Tax. Those attending a full-time college or university course are currently exempt from the levy – which typically costs more than £1,000 for an average home.

The Department for Communities and Local Government has released minutes of a meeting held last October between Eric Pickles, the Communities Secretary and senior figures at the Local Government Association, under Freedom of Information laws.

At the meeting, Gerald Vernon-Jackson, the leader of Liberal Democrat councillors and head of Portsmouth City Council said: “Local authorities should have greater discretion over Council Tax exemptions and discounts, such as the student exemption”. 

The comments are likely to reopen controversy within the Liberal Democrats over the party’s treatment of students. The party campaigned against increasing tuition fees at the last election – before ultimately supporting a rise in the fees to up to £9,000 from this September.

The decision caused outrage among Liberal Democrat supporters, many of whom are students. A call to increase the cost of being a student by hundreds of pounds through the introduction of council tax is likely to prove deeply unpopular.

It is understood that the Conservatives are strongly opposed to ending the student exemption on council tax.

The Liberal Democrats have been broadly criticised over the issue of tuition fees, after reneging on pre-election promises not to raise university charges. While in opposition, leader Nick Clegg pledged to abandon the fees altogether and won the support of thousands of students across Britain.

Before the election, he signed a promise not to raise tuition fees, saying unequivocally: “We want to abolish tuition fees. We think they're wrong.” But after joining the coalition government, he claimed the economic situation forced him to accept the rise.

His party signed up to government policy allowing institutions to charge up to £9,000 pounds a year, a change which saw student fees rocket. Tens of thousands of students took to the streets to protest against the rise, wielding effigies and placards accusing the Lib Dem leader of “conning” them. He later admitted he had “not been able to deliver the policy that we held in opposition” and blamed the financial situation for the change.

At the time, Labour deputy leader Harriet Harman ridiculed Mr Clegg, claiming he had “hawked” his way around university campuses seeking student votes ahead of the general election. She joked: “We all know what it's like: you are at freshers' week, you meet up with a dodgy bloke and you do things that you regret. "Isn't it true he has been led astray by the Tories, isn't that the truth of it?"

Mr Clegg later commented: “In politics, just as in life, sometimes the things that you want to do, it turns out that you just can't do them.” The Liberal Democrats today insisted that they were not in favour of ending the student exemption for council tax and said the minutes were not an accurate reflection of their views.

In a statement, the party said: "These minutes are not an accurate representation of what was a much broader policy discussion. “Gerald is not in favour of getting rid of the student exemption. He is in favour of proper localisms, where councils have the power to decide what is right for them in their areas.

“Neither the Government nor the Liberal Democrats are in favour of ending the student exemption.”

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Are you paying too much Council Tax?

Chief constable's warning over council tax freeze is ignored

First Published by: The Guardian

Tony Melville says Gloucestershire may be unable to provide basic policing, yet police authority votes against rise in share of tax.

A police chief constable has warned that a Council Tax freeze means his force may be unable to provide basic services, and could lead to a drop in public confidence and morale among officers.

Gloucestershire Police Authority ignored the warnings of the chief constable, Tony Melville, that cuts had already pushed his force to a "cliff edge" and on Thursday voted against an increase in the police share of the council tax.

Melville told members, who had convened to set the budget, that the potential impact of more lost revenue could be "catastrophic" with the force unable to guarantee basic operational services across the county. That could lead to public confidence in the police, as well as staff morale, falling, he added.

Freezing the precept – the part of council tax set aside for policing – would put neighbourhood policing at risk. "We know people are more confident in policing if they believe neighbourhood policing is effective in their area," he said.

Melville dismissed the idea there were thousands of officers working in the "back office" that could be called upon. "There is no cupboard full of police officers that I can turn out onto the streets."

Melville made headlines last month when he decided to go public about his fears. It was the starkest warning yet from a police chief about the challenges forces are facing because of cuts.

Detective Chief Superintendent Gavin Thomas, the chairman of the Gloucestershire branch of the Superintendents' Association, told the authority meeting that any decision other than increasing the precept would take the force "one step too far". There would potentially be no choice but to reduce in "frontline" areas, such as tackling burglars and protecting children, he said.

The police are arguing the decision to veto a 2.9% rise – the equivalent of an annual increase of £6 a household – means a cut of another £1.3m. That equates to the loss of more than 40 officers. Gloucestershire police has already shut police stations and made officers and staff redundant to cope with cuts of £24M on its £103m budget.

The budget shortfall will be covered this year by a one-off council tax grant from central government. But police in Gloucestershire, and in other forces, said the grant will only help in the short term.

Initially the budget meeting in Cheltenham was deadlocked. But the members eventually voted by 10-4 to freeze the tax. The authority, which is chaired by the Conservative councillor Rob Garnham, has been accused of pushing forward with the freeze for political reasons.

Garnham said a government grant would help maintain the service, keep people safe and drive down crime.

Are you paying too much Council Tax?

Concern as Cumbria Police Authority agree council tax precept rise

First Published by: Cumbria 24

Cumbria Police Authority has voted to increase its share of council tax by 3.6 per cent in Cumbria this year. Members approved the increase following a vote at the Police Authority meeting at Police Headquarters, Penrith to reject a one-off grant of £1million offered by the Government. This grant is offered to Police Authorities that choose to freeze the amount of Council Tax each household in Cumbria pays in the next financial year.   The Police Authority receives just over two thirds of its funding from central government and the further third from council tax.

Concerns centered around the grant being a one-off payment which would mean that the Police Authority would need to recoup the money in future years by raising council tax more than usual. However, a cap on the increase in annual council tax would mean that the shortfall of the £1million offered this year by the Government may not be recovered by the Constabulary in future years. This would result in the Constabulary needing to save an additional £1million on top of the £20m that needs to be saved by 2015/16.

The agreed council tax rise will equate to an estimated increase of 10p a week for residents in a band B property. The exact amount of the increase depends on the council tax band for residents’ properties.

The Constabulary is already making £20 million savings as a result of the reduction in the government support grant. Chair of the Police Authority Ray Cole said: “This is the last budget that the Police Authority will set ahead of the Police and Crime Commissioners and it was important to get it right for the future of policing in Cumbria.

“We have listened to what the people of Cumbria told us and have increased the council tax in order to maintain our front-line policing in the county. 

“One option was to take the grant from the Government but longer-term this would have had resulted in significant difficulties for the Constabulary in maintaining police officer numbers.”

Chief Constable of Cumbria Constabulary, Stuart Hyde, said: “It was a difficult decision for the Police Authority today and I am extremely grateful that they have taken the bold move to help us address the reduction in central grant.

“Currently, the Constabulary is in the process of reducing its budget by 20% and will continue to find further efficiencies.  It would have been difficult to sustain front-line policing at its current level had the Police Authority accepted the grant.”

Are you paying too much Council Tax?

What Bailiffs Can Charge - Know Your Rights

First Published by: Advice Now

Some bailiffs take advantage of the fact that few people know what they can and can't be charged for and, according to an undercover reporter for the BBC, bumping up charges and charging for visits that never actually occurred happens frequently. Always check what you have been charged for, and question any visits that sound unlikely. The National Standard requires bailiffs to issue a notice every time they do something for which they charge you a fee. Ask to see copies of the notices that go with any suspicious visits or other fees.

How much bailiffs are allowed to charge, and for what, depends on the type of debt they are collecting. When the bailiffs come round they should give you a copy of their scale of charges. If they don't, ask for one.

You should definitely also ask in writing for a breakdown of what the bailiffs are charging you. You can use this to check that you are not being overcharged.

If you think you have been overcharged, or are unsure if the charges are correct, get help from an adviser. You have a number of options for challenging fees, including asking a judge to decide if the fees are fair and correct.

Bailiffs and Council Tax issues:

Bailiffs collecting Council Tax are not allowed to charge you for letters, but they can charge for 2 visits. They can't charge you for any more than two visits (unless you owe Council tax for more than one year, then they can charge you for two visits per year). If they take your stuff, they can also make a 'levy charge' for their time and effort. The amount depends on the size of your debt: the more you owe, the higher the charge. Get advice about the current figures.

They can also charge for making a Walking Possession Agreement and, if you have not kept to the agreement, they can charge you for hiring a van to take your belongings away. This must be in line with normal van hire rates. Bailiffs cannot bring a van to your home and try to charge you for it before they get a 'walking possession agreement' - although many dodgy bailiffs will try this.

They can also charge 'reasonable costs' for selling your stuff. If they have taken your stuff away, but don't sell it (because you have since paid up) they can still charge you. If you have paid the debt and costs off in full (whether by a lump sum payment or by instalments) they cannot charge you - although this is also something dodgy firms will try.

Be suspicious of anything not mentioned here - in particular anything called an 'enforcement' fee. If they do charge you more, get help from an advice centre.

Are you paying too much Council Tax?